Floor Statements

Madam Speaker, for 14 years, Dixon Osburn has been the Executive Director of the Service Members Legal Defense Network, an extremely effective and principled organization that has fought against the unfair discrimination against gay, lesbian and bisexual people in the U.S. armed services. It is hard to combine passion and common sense in a political cause--people who feel strongly often have an understandable difficulty in controlling their strong feelings to the point where they can follow the most rational strategies, and serving as the head of an organization exacerbates this, since the head of such a group is required to preach thoughtfulness to people who are--often justifiably--far too angry to want to think about things.

Dixon Osburn as Executive Director of SLDN performed this extremely difficult task very, very well. No one ever doubted the depth of his commitment to the cause of fairness for LGBT service members, and no one could fault the analytical discipline he brought to the job. I believe that we will some day in the near future abolish this unfair ``don't ask, don't tell'' policy, which discriminates against individuals and deprives our military of personnel who would perform useful services at a time when we need that. When we do reach that goal, the important work that Dixon Osburn has done over these past 14 years will deserve a great deal of the credit.

Mr. Speaker, I have a parliamentary inquiry.

Under the rules, is there any limit to the number of times a Member may ask the identical parliamentary inquiry?

Madam Speaker, one of the most important institutions in the part of southeastern Massachusetts I have the privilege of representing, is the University of Massachusetts Dartmouth. The school has a justified reputation as a key agent for economic and educational development in the region, particularly along the State's south coast. One of the reasons for that reputation is Professor Brian Rothschild, who was until recently the Dean of UMass Dartmouth's School for Marine Science and Technology, SMAST, and currently serves as the school's Montgomery Charter Professor of Marine Science and Technology, as well as Co-Director of the Massachusetts Marine Fisheries Institute, and Chairman of New Bedford Mayor Scott Lang's Ocean and Fisheries Council.

I was delighted to learn that the National Oceanic and Atmospheric Administration, NOAA, recently named Dr. Rothschild as one of the recipients of the agency's 2007 Sustainable Fisheries Leadership Awards. I can't think of anyone who is more deserving of this award, or who better exemplifies the effort to harness science in the furtherance of sustainable fisheries. I have found him to be not only an accurate, completely reliable source of information, but also someone who consistently offers creative solutions to fishery science and management problems. In other words, he not only possesses extraordinary scientific acumen--he also uses it in the service of larger, societal goals.

For him, sustainability means a fishery that supports both healthy stocks and healthy fishing communities. Knowing of his commitment to this concept, I was not surprised he was chosen to head New Bedford's Ocean and Fisheries Council. This position has given him a broader platform from which to promote sustainability, and his advice and contributions continue to be valuable, whether they relate to the recently enacted Magnuson Reauthorization bill, environmental factors that affect fish stock abundance, how to more accurately determine fish populations in multi-species fisheries, or other vital research areas.

Madam Speaker, in view of Professor Brian Rothschild's distinguished career in fishery science, and in recognition of his many contributions to that discipline in southeastern Massachusetts and all of New England, I applaud NOAA's decision to honor him with a Sustainable Fisheries Leadership A ward, and I ask that the recent New Bedford Standard-Times article noting this achievement be printed here.

[From the New Bedford Standard-Times, April 21, 2007]

UMD's Rothschild Wins NOAA Award

(By Becky W. Evans)

New Bedford.--Fishery scientist Brian Rothschild has won

the National Oceanic and Atmospheric Administration's

sustainable fisheries leadership award for his contributions

to marine science and education.

Dr. Rothschild, former dean of the UMass Dartmouth School

for Marine Science and Technology, is one of seven recipients

of the award, created in 2005 to recognize individuals,

organizations and industries ``whose contributions to science

and management have served to promote best stewardship

practices for the sustained use of the nation's living marine

resources,'' according to NOAA's Office of Constituent

Services.

``I feel very appreciative of people who recommended me for

this honor,'' Dr. Rothschild said. ``I have dedicated my

whole career to service and it is nice to have some

recognition.''

Dr. Rothschild is the Montgomery Charter Professor of

Marine Science and Technology at SMAST. He also is chairman

of New Bedford Mayor Scott W. Lang's Ocean and Fisheries

Council and is co-director of the Massachusetts Marine

Fisheries Institute.

According to NOAA, Dr. Rothschild is ``one of the most

cited fishery scientists in the world,'' having published

more than 100 scientific papers and book chapters. His

research interests include population dynamics, biological

oceanography, fisheries management and natural resources

policy.

Before arriving at SMAST in 1995. Dr. Rothschild held

professorships at the University of Washington and the Center

for Environmental and Estuarine Studies at the University of

Maryland. He spent a decade working for NOAA as a policy

adviser and director of several offices. He has consulted on

fishery issues for the United Nations' Food and Agriculture

Organization in India and Namibia and with the governments of

Great Britain, Korea, Egypt, Peru, France and the Republic of

Ireland.

The sustainable fisheries leadership awards will be

presented during a ceremony in Washington, D.C., on June 7.

Mr. Chairman, I move to strike the requisite number of words.

Mr. Chairman, this is an amendment, the purpose of which is to let people vote against the bill without voting against the bill. What the amendment says is, we don't need the bill. There are some Members who are apparently reluctant to vote against the bill. There would be no reason to vote for this amendment in the normal course of events. What it says is that we don't need anything else.

Again, the effect of this amendment is exactly, exactly the same as voting ``no'' on the bill. But some Members have a problem. There are a lot of examples of excessive compensation in the minds of many. I would note that this Congress will not be making any judgment about what is or isn't excessive.

One amendment was offered by a Republican that would have had us differentiate based on some definition of ``excessive.'' I hope that is voted down. I don't think we should be that intrusive. What the amendment says is, we don't need a bill. Well, if you don't need the bill, you vote ``no.'' Why would you vote for an amendment that says you don't need a bill instead of simply voting ``no''?

The answer is, you don't want to be accused of voting ``no'' on the bill, so you vote for an amendment which has the same effect as killing the bill but is worded slightly differently.

I do note, and I acknowledge my colleagues on the other side agreeing, because someone said, oh, the government shouldn't get involved in this. What this does is celebrate a significant government involvement in the pay practices of corporations. What it says is that the rules issued by the Securities and Exchange Commission, dominated by Republicans, run by a former Republican Member of this House as the chairman, that those rules are adequate and complete. In other words, it says, ``Those are a good thing. That's all we need.''

Understand that those rules were a ``mandate,'' to use the word that has been used here, a significant mandate by the Federal Government into private corporations. It says to private corporations, we, the Securities and Exchange Commission, this was done last year, we order you against your will, because if you want to do it, you could have done it voluntarily, we order you as the Federal Government to print on every proxy form the following information in the following form.

I am glad they did that. I am glad that my colleagues implicitly repudiate this notion that somehow the Federal Government is not supposed to tell corporations what to do. The SEC did do that. But now the question is, what do you do with the information?

It is interesting. I was just shown by one of the members of the staff an article where the corporation, United Health, was asked to allow a vote, then, by the shareholders on this information which the SEC has put forward, and they said, well, that would put us at a competitive disadvantage in America because some companies would do it and some wouldn't.

This bill simply eliminates the competitive disadvantage. It says every corporation can do it.

I was asked before, why don't you leave this to the market. That's what this bill does. The market consists of the people who own the shares, who buy the shares. This bill empowers them.

Finally, I do want to note that my colleagues are giving a different set of arguments, my colleagues on the other side, today apparently, than Wednesday. On Wednesday, there was a lot of patriotism and a lot of talk about, let's not do what other countries do, let's stick with America. There were a lot of references to America's success in the corporate world. The gentleman from Georgia offering this amendment to kill the bill without a vote to kill the bill, says, America is doing so well, why jeopardize it?

So I urge Members to study the two alternative approaches. In fact, the gentleman from Georgia today says America is not doing so good, we've got to be careful; we're losing IPOs, we're losing things. The argument that we have been hearing, and he is joined by others in making it, is that we're losing them primarily to England because of the corporate practices in England. That's what the committee appointed by the Secretary of the Treasury said, or inspired by him said. That's what the McKinsey report said: England does this.

What we are proposing today is exactly the model that has been followed in England. If you believe what the gentleman from Georgia said, which is that we are losing financial business, I think that has been overstated, but we are losing financial business to others, and the country that we are told we are losing it to does exactly what we are doing.

The fact is that letting the people who own the company vote on information that the SEC has required the company to put forward as to whether or not they approve or disapprove that that's what the people they hired should be paid is not at all intrusive. It hasn't caused problems in England. We think it has had a reasonable effect in moderating corporate excesses. That is why I hope that we will vote down this amendment.

By the way, if this amendment is voted down, the people who don't want to vote for the bill don't have to vote for the bill. But they ought to be willing to vote ``yes'' or ``no'' on the bill and not defeated by this kind of wording which gives people a chance to vote ``no'' without standing up and doing it.

Will the gentleman yield?

I apologize, then. I inferred that the Members on the other side were being supportive of what our former colleague, Mr. Cox, did. If, in fact, I have incorrectly assumed that my colleagues were supportive of what the Republican SEC has done, rather than simply taking account of it, I will withdraw that, and I will not impute to you approval of what Mr. Cox has done.

Mr. Chairman, I move to strike the requisite number of words.

First, Mr. Chairman, I look forward to the subdebate between the gentleman from Illinois and the gentleman from Georgia on the Republican side.

Just to recap, I said I was glad that the gentleman from Georgia, apparently on behalf of the Republicans, agreed with what the SEC did. The gentleman from Illinois took me to task and said, nothing in the amendment was approving. So I said, okay, I withdraw the notion that it was approving.

But then the gentleman from Georgia came back and said, it does approve. So I would urge the two of them to work that out. I would be glad to either give them the acknowledgment, as the gentleman from Georgia said, that they support it; or retract that compliment to Mr. Cox, as the gentleman from Illinois prefers. But I am confused now as to their difference.

As to the gentleman from Florida's amendment, it does exactly what our amendment is inaccurately accused of doing, it intrudes the Congress into the internal pay decisions of the corporation.

We are strictly, scrupulously, completely neutral as to how the corporations pay their CEOs and others. We simply say that the market should work, that these shareholders should decide. And the gentleman said, shareholders have that right now. They do in some places, they do in some States, they do in some corporations; they do not in others. There is no uniform, legally enforceable right for shareholders to do this; and some corporations have refused to do it. United Health Service recently refused a request from a pension fund to do that. There is no uniform right.

By the way, it is a matter of State law or Federal law. This notion that we are intruding on the private corporation, as they said on Wednesday, makes no sense. Private corporations are the creation of positive law, and positive law says, here are the rights and here are the duties, et cetera.

Indeed, the gentleman from Georgia, who, unlike the gentleman from Illinois, approves of what the SEC did, says Washington shouldn't decide. But on the other hand, he is for what the SEC did. Has the SEC decamped to Wichita when I wasn't looking? I would have thought, as chairman of the committee, if the SEC had moved out of Washington, someone would have told me. Maybe they're not getting my mail. But how can you say that Washington should tell corporations what to do and be so supportive of this SEC intervention?

And on the subject of intervention, what the gentleman from Florida would do, would have us say is, you have to have a shareholder vote if you have certain kinds of compensation, but you don't have to have a shareholder vote if you have other kinds of compensation. And what is the majority, and is it nonqualified deferred? It would be a far greater intrusion both substantively and procedurally than what we say.

We say, have a vote, let the shareholders vote. Terribly radical. Let those people who own the corporation give their opinion on what the CEO should be paid.

The gentleman from Florida says ``no,'' but here is the deal: Some corporations hate that. They don't want these pesky shareholders having a say on how many hundred million dollars a guy ought to get when he gets fired, so we will say ``yes'' in some cases, ``no'' in others.

The gentleman said we should kind of give them an incentive. Well, I don't think that is the case. I don't think Congress ought to be picking and choosing as to what is the right kind of corporate compensation and what is not the right kind of corporate compensation. But that is what the amendment does. The amendment does exactly what, as I said, our bill carefully avoids doing: It puts Congress into the decision-making process and says, if you do it the way we, Congress, think is right, you are okay; if you don't do it the way Congress thinks is right, you have a shareholder vote.

Now, I don't think a shareholder vote is any problem. But for those who do, if you really do, then you are intruding the Congress into that process in a way that we have sought to avoid. So I hope that the amendment is defeated.

Mr. Chairman, I move to strike the requisite number of words.

Let me begin with the gentleman from New Jersey's worrying that the investor might be hurt by what we would do. I guess the motto of investor in this case should be ``Stop me before I vote again.''

How are we going to hurt the investor? We are going to say to those investors, You know the information that is going to be presented to you because the SEC mandated that companies do it? You get to say whether you approve or disapprove of that proposal.

That is going to hurt the investor? Are investors so much in need of protection from themselves that they must be prevented from voting on this?

This is part of the problem. It is an inversion of capitalism here. The CEOs don't own the company. The boards don't own the company. The shareholders own the company. They are the market. And all this bill does is to empower them.

By the way, when the gentleman from Illinois says we are rushing in, he has a very different definition of ``rushing in'' than I do. This takes effect in 2009. We, in fact, were approached by some, the Business Roundtable. They still don't like the bill.

I yield to the gentleman from Georgia.

Yes. And reclaiming my time, I will tell him what it is. If all this asks for was for the SEC to study it, I would support the amendment. And section B, ``The commission shall conduct a study,'' I would be glad to support that. Indeed, the commission could do that on its own. What I object to is a point has been made before and it is constitutional, Congress being made to wait for permission from the regulatory agency to do things.

So, again, and I appreciate the gentleman, but I do want to go back to the error of the gentleman from Illinois when he said we had to hit the pause button. This does not take effect until 2009. We are not rushing into anything. And we delayed the effective date at the request of the Business Roundtable so there would be no burden in paperwork on the company.

Between now and 2009, if the SEC wants to do a study, it can do a study. If you want to mandate that they do it, I would be glad to mandate that, although the SEC has been somewhat overworked. The difference is, and the reason I object is, this says that Congress will not go forward with what most of us on our side, and many on the other side, think is a good idea until the SEC gives us permission. I do not think constitutionally we should await permission from the regulatory agency.

By the way, the gentleman from Illinois, I don't understand. He wants to find an inconsistency, and when he can't find one, somehow he manufactures one. I never said the SEC was all wise and all knowing. He is caricaturing things that weren't even said. What I did was to acknowledge that the SEC has moved here and the SEC, I do want to remind my colleagues, is in Washington. All this rhetoric about no mandates from Washington is wholly inconsistent with the affirmation of the SEC's having correctly proposed the information.

I would also say to the gentleman from Georgia, I was not struck by the fact that he and the gentleman from Illinois differ. It has been clear to me for some time. I have been on the committee. The gentleman from Georgia and his Republican colleagues often differ, and I will say in the spirit of the French assembly ``vive la difference.'' I encourage people to differ with the gentleman from Georgia. I would hardly chide them for it.

What I was responding to is the gentleman from Illinois accusing me of misstating the views of the gentleman from Georgia, and I am glad the gentleman from Georgia cleared that up.

But back to the main point. We have until 2009. Yes, the SEC has the right to study this if it wants to. And if this was simply a mandate that the SEC study it, it would be a different story. But saying that the bill is contingent on the SEC's finding seems to me constitutionally unwise. That's why I would not support it as is, but I would support a modified version.

Mr. Chairman, I will yield to the gentleman from Illinois.

Let me take back my time.

Two points. First of all, I do want to respond to this really terrible argument that this might drive companies to go private. Do Members realize, Mr. Chairman, how viciously that attacks the CEOs? That argument says this: A CEO faced with the possibility of people voting on his or her salary will take that company private. I think that is a terrible thing to say.

Secondly, if the SEC makes a recommendation, we are here to listen to it.

Mr. Chairman, I demand a recorded vote.

Mr. Speaker, I rise in opposition to the motion to recommit.

Mr. Speaker, never has the willingness of the minority to abuse the process for purely political ends been truer than today.

Mr. Speaker, this bill was voted on in committee in a multi-day markup. A number of amendments were offered and debated. One amendment offered by the gentleman from Connecticut (Mr. Shays) aimed directly at this point, and the language was accepted by us and is in the bill, and it says that nothing in here shall create a new fiduciary duty; and it was intended to achieve exactly what we are now told this has sought to achieve. If Members genuinely thought it was inadequate, they had the rest of the markup to try to amend it. And we are here under an open rule. If the Members thought that the bill that we had voted on and which they had every chance to amend needed further amendment, the democratic procedure, the procedure that shows respect for the process, would have been to file an amendment. Had this been an amendment, we could have debated it for more than 5 minutes. We could even have read it for more than 2. This was delivered to me about 2 minutes before we started.

I am not one of the more modest Members of the body, I concede. But I do not credit myself with being on my own, off the top of my head, not having practiced law ever except for the fact that I am a member of the bar, I am not able to fully analyze this. It might be something very useful. And people who are genuinely interested in adding it to the bill could have offered it in committee; they could have offered it under the open rule; we could have debated it. We have had a large number of roll calls; we just had seven roll calls.

Now, we have been told in the past, well, I had to do a recommit, you wouldn't give me any other chance. Members on the other side had every opportunity at the committee and in this open rule fully to debate this and to offer amendments. They chose not to. They chose instead to legislate by ambush.

Mr. Speaker, I had underestimated the tenderness of the feelings of the Members opposite. I confess to insensitivity, but I will not confess to the disrespect for our legislative process that Members--

Of course not. The gentleman asked for a courtesy. Had the gentleman offered this in committee, I would have been glad to have a dialogue with him. Had he seriously wanted this amendment and offered it during the floor, we could have talked about it. But to wait until the last minute when we can't read it, to refuse to take advantage of an open rule, to refuse to offer it in committee, and now ask me to yield to you? Of course not.

Now, I want to emphasize again: this may or may not be good. I will guarantee the Members here will look at this. We have a way to go on this bill. It has to go to the Senate. If in fact we need further to tighten the language,

and it was the gentleman from Connecticut, Mr. Shays' amendment that we adopted that sought to do this, if the gentleman from Florida is right and Mr. Shays' was inadequate, if the gentleman from Florida is right and Mr. Shays' amendment doesn't do the job, we will analyze it seriously. But I urge Members, do not on a serious legal issue, when we have had 2 minutes to look at a complex legal principle, vote to put it into a bill when the Members advocating it deliberately refused to subject it to an open democratic process.

I hope this is repudiated.

I thank the gentleman and the Rules Committee for bringing forward an open rule.

I often disagree with my colleagues on the other side, but I have rarely before been as baffled by the illogic of their argument as I am today. I do not recall the last time I heard such a hodgepodge of inconsistency and inaccuracy.

This is a bill that has been condemned for being, A, bullying and intrusive, and B, toothless. The toothless bully is, I guess, a new concept. In fact, let me begin with this denigration of the notion of nonbinding resolution.

The gentleman from Texas kind of slipped, I think, when he said ``the sense of shareholder resolution.'' In fact, we spend much of our time passing nonbinding resolutions. Members who think nonbinding resolutions are a waste of time probably should just show up on Wednesday because that is all we do generally on Mondays and Tuesdays, although we are doing more since we have taken over.

But let's get to more of the substantive mistakes. My friend from Alabama said we would be second-guessing every corporate salary. Of course not. That isn't even remotely close to being even partially true. We have deliberately said it is not our job to say what the salary should be. We are empowering the shareholders to voice their opinion.

Now, I will acknowledge at the outset, if a board of directors sees a vote and the majority of the shareholders vote ``no'' and they decide to vote ``yes,'' the board has that right. I doubt that the board would do that much. In fact, I would not impute to the boards of directors what my colleagues impute to them, a contempt for the views of shareholders. There may be individual cases where shareholders didn't understand certain things, new events may have intervened. But, no, I do not believe that as a general rule people on the board of directors will ignore shareholders.

And by the way, we are talking about the shareholders, and I know the gentleman from Texas said they are outsiders, they are activists, as loathsome a word as the rules of the House will allow as he would use it. They own shares. They are the owners of the companies. What a denigration of the people who are in other contexts the fountain of all wisdom. We are told the market is, after all, the best source of wisdom.

The former majority leader from Texas used to say, governments are dumb; markets are smart, markets work well. Well, who is the market? The market consists of the people who own the shares in this case. How did they become so dumb when it comes to deciding how to pay for the people that work for them?

And we are told, okay, if they don't like it, they can sell their shares. What a concept of ownership. I mean, these are the people, many of them who are outraged at the eminent domain issue. What they are saying is, if you have owned shares in a company for a while, you have made your decision that this is the best way to diversify your portfolio, and then some board makes a decision with which you disagree, that you think may hurt the company, sell your shares. What kind of a denigration of the notion of ownership is that?

There are, of course, people who will tell you, wait a minute, what if I believe when Home Depot, for instance, did what it did with Nardelli, it had a very negative effect on people's perception of the company. One of the very decisions you disagreed with led to a drop in the value of the shares because the market said, why did they do that. Should you then sell your shares and be forced to take a loss or take corrective action and restore the value to your shares? That is what we are talking about. It is very simple.

And then the oddest one of all is, how dare we interfere with corporations? Corporations are artificial creations of positive law. God made no corporations. No corporations evolved. I will be neutral on that subject. Corporations exist because the law of a jurisdiction creates them. It creates them to give them certain advantages, certain immunities, et cetera.

Of course, the government tells corporations what the rules are. This notion that we are interfering with corporations is nonsensical. They exist according to positive law. And the law says, you must do this, you may not do that. That is what corporations are.

And now the gentleman will say, oh, well, look what the SEC did, we don't have to get involved. What the Securities and Exchange Commission did was very intrusive. And the gentleman said, well, the corporation can do that if they want to; they could have published the salaries if they wanted to. The Securities and Exchange Commission said, we mandate you to print these salaries.

And by the way, to the extent that there is an expense, it is much more in what the SEC did than in what we did. CBO has concurred, there is zero, maybe 8 cents expense here. The SEC has already mandated that the corporations print in the proxy form all this information. We mandate that they add a box, ``yes or no.''

And then my friend from Alabama, great civil libertarian, but on this one I think he may have gotten a little too extreme in his civil libertarian zeal, he said, we are making the shareholders vote. It sounded like he said we are standing over those poor shareholders with a whip and making them vote. Well, in the first place, we are not. Abstention remains an option for shareholders.

Secondly, the argument is, well, they already have that right, some of them. No, they don't in every case. There are corporations that have refused to allow it. AT&T was just ordered by the Securities and Exchange Commission to allow this procedure, but it was a case-by-case issue. It is not a general rule. So the SEC that you defend just ordered AT&T to do this, they just intruded, as is their right; but there is not a general principle.

Shareholders do not have a right to have this vote on executive compensation. And this bill simply says, the people who own the company take what the SEC has mandated they put forward, has a right to vote on it. Now we are told, and the gentleman from Texas, in a stirring peroration, said he stood for truth, justice, the American way, et cetera; and said, let's reject the European effort.

Well, this is not a general European practice, it is a practice in England, what we are talking about. There is a committee that is known as the Paulson Committee, because it was inspired by Secretary of the Treasury Paulson, chaired by Professor Scott of Harvard. There was the McKenzie report, done by Mayor Bloomberg, strongly supported by the Chamber of Commerce and all the financial groups. They have said to us, can't you guys be more like England in your regulation of corporations?

Listen to the debate going on right now over relations of corporations in America. We are being told that the

model is the British model, the Financial Services authority. This is Secretary Paulson's committee that said it, this is the Chamber of Commerce.

Yes, the English do do this, it is not a big continental thing. But if, in fact, you think we should be very careful never to do anything because the English are doing it, then where is the repudiation of the McKenzie report and the Paulson Committee report which have urged the SEC to follow the model of Financial Services.

In fact, it is very straightforward. Here is the problem. Why do normally coherent Members talk in less than coherent form about this, making contradictory arguments, ignoring reality?

Here is the deal. My friend from Alabama said, I am not here to defend CEO salaries. But in fact he is, because what this bill says is, the shareholders, not the outsiders, not those evil activists, not those lurking labor agitators, people who own shares. And, by the way, this is strongly supported by the leaders of institutional shareholders, large pension funds, The Corporate Library. Shareholder groups are in favor of this. And it says that people who own the shares should be able to vote in an advisory capacity on whether they think the compensation is too much or too little.

Now, the fact is that the gentleman from Alabama said there have been outrageous examples of excessive compensation. It is going up in general to the point where it is a record problem, and he says he is not here to defend them. He is not here to defend them verbally, he is just here to defend them parliamentarily, because if this bill dies, then they are totally unimpeded. And Members have said, don't rush in. Well, these salaries have been going up for a long time, and this is a long-time trend. So if not this, what do you do? It is true, the SEC went to the limits of its power.

I yield to the gentleman from Alabama.

In the House. Yes, sir.

The gentleman misunderstands my point, and I will correct it. I am taking back my time. I was not referring to the gentleman's de facto defense of the salary; I was referring to the gentleman from Texas' statement.

He denigrated the product of this legislation because it would produce a nonbinding resolution. In fact, he sneered at it as a sense of the stockholder, sense of the shareholder resolution. And my point was aimed at his argument that the notion of a sense of the resolution is meaningless would invalidate a lot of what we do. So that is the issue I was making.

Let me just say in closing, Members on the other side sometimes get separation anxiety when they are forced to differentiate themselves from particular corporate abuses. They brought themselves to do it with Sarbanes-Oxley, but they are having in various ways buyer's remorse there, I think excessive buyer's remorse.

Members say we don't like corporate excesses, but we can't do anything about it.

Well, no, Congress should not substitute its judgment for the market, Congress should not set the salaries. What Congress can do is to empower the shareholders who own the companies to express their opinion. It is not a right that the shareholders uniformly have now. It is Congress in exercise of the legislative power to set the rules for corporations, which is inherent in the nature of corporations saying that on this one issue; and by the way, one reason for singling them out is, there is reason to believe that the relationship between the boards of directors and CEOs is not sufficiently arm's length for the decision to be left entirely to the board without input.

It doesn't mean you take the decision away from the board elsewhere. It simply says there have been excesses in corporation compensation, we think it would be helpful if the shareholders could give an advisory vote.

There is really no good argument against it, and that is why we have heard arguments against that aren't very good, that aren't very logical, that aren't based in reality. That is all we are voting on.

And in the absence of this bill, Members can then take credit for continuing to enable salaries paid to the top executives to go up and up and up. And if you are a shareholder of a corporation and you think that is a mistake and you think that is damaging, you have the option, we are told, of selling your shares at a loss, of being excluded from an investment decision that you think is in your interest. That is not acceptable.

Mr. Speaker, I ask unanimous consent that the Clerk be permitted to make technical changes in the engrossing papers to conform to the Union Calendar print of the bill.

Mr. Speaker, I ask unanimous consent that all Members may have five legislative days within which to revise and extend their remarks on H.R. 1257, and to insert extraneous material thereon.

Mr. Chairman, I yield myself such time as I may consume.

This is a bill to further the workings of the capitalist system of the United States. It has one very specific provision. It says that the shareholders, the owners of public corporations, will be allowed to vote every year in an advisory capacity on the compensation paid to their employees who run the companies.

Now, Mr. Chairman, some might think this is unnecessary. In a better world, it would be. But there is not now any clear-cut, uniform, legal right for the shareholders to get such a vote. Some corporations allow it, some do not. Some boards of directors allow it, some do not. In a recent case, the SEC ordered AT&T to allow such a vote, but it was because of certain circumstances. There is no general principle that allows it.

We do have, thanks to the Securities and Exchange Commission under our former colleague from California, Mr. Cox, a provision that I am sure many considered to be an intrusion into the private affairs of corporations, because without regard to the wishes of the corporations, the SEC under Chairman Cox has unanimously adopted rules that require corporations to put in the annual proxy form a chart of compensation for the top officials and an explanation of the theory of the compensation by which they are there.

Understand that this is a decision by the SEC to require corporations to do what they would not otherwise have done, because it only applies to those who haven't done it.

We add one simple fact here. The SEC has said that it does not have the power to go further and compel corporations to allow the owners to vote. Our bill simply does that. Our bill simply says, you will have on your proxy form, printed anyway, what the compensation figures are. There is no debate about how they will be presented. We require, if this bill passes, corporations simply to add to that a box that says ``I approve/I disapprove,'' and you can check it as appropriate. And the sole expense to the corporation is the ink in printing ``approve'' or ``disapprove,'' and the tallying along with the other tallying. There is no additional paper, there is no additional anything else.

We have had a situation in which people, including the President of the United States, have acknowledged that in some cases CEO compensation has become excessive. I believe that that is clearly the case. A study done by Professor Lucian Bebchuk at Harvard, unrefuted by the defenders of the current corporate compensation system, notes that the amount of corporate profits going to the salaries for the top three employees, the compensation to the top three employees has about doubled to the point where a year or so ago it was nearly 10 percent.

We are talking about real money. We are talking about money that goes to these top executives that could be used for other purposes. For example, when Mr. Nardelli of Home Depot received a $210 million good- bye kiss that had been written into his contract, when he was fired and given a $210 million consolation prize, Home Depot was at the same time announcing that they were putting $350 million into improving the stores. Well, suppose Mr. Nardelli had been sent out into the cold, hard world with only $50 million for the rest of his life. $160 million more would have been available to add to that $350 million for the stores, considerably more than a third. In other words, that was a real number. If $350 million can fix up the stores significantly, another $50 million or $75 million could have increased that by up to 50 percent.

The President himself has acknowledged that the compensation has gotten out of hand. But from the standpoint of the President, excessive CEO compensation, increased inequality in our economy, which is a part of this, global warming, they all have certain common elements; the President and some of his supporters have reluctantly acknowledged the reality of those things, having denied them for some time, but they appear to regard them as facts of nature that were neither caused by nor can be corrected by human action. We disagree with that.

Now, people have suggested that the salaries are too high and Congress should limit them. We reject that. This bill as we have presented it does not intrude into the process of setting compensation.

Mr. Chairman, some of the amendments offered would do that. There are amendments that would alter the effect of this, depending on the kind and amount of compensation. I think those are erroneous. I think some of my friends on the other side have become, in their zeal to defend corporate compensation levels, de facto, in a bad situation. They would be more intrusive.

All we say is this: The shareholders own the companies, and we believe the shareholders should be allowed to vote.

Now, some people have said that is up to the board of directors, why are you singling out compensation for the CEO? And there is a good reason. You can make arguments about corporate governance one way or the other. We are not going beyond one point here. The relationship between the CEOs and the boards of directors is very different than most of the relationships the boards of directors have. The CEOs and the boards of directors select each other. There is a lack of an arm's length situation there that we think makes it appropriate to single it out and let the shareholders vote.

It is only an advisory vote, that is true, and you will hear the contradictory argument that we are both too intrusive and not sufficiently intrusive into the affairs of the corporations. But we have more confidence in the boards of directors than some of our colleagues. Not completely, or we wouldn't have this bill. But we do not think boards of directors will likely disregard an advisory opinion from the shareholders and, therefore, we think that is an important input that the board should have. They have their ultimate responsibility, and maybe they will find some special circumstance that says, we can't follow in this case. The shareholders own the company, and we are simply giving them this right.

The last point is, and we have heard people say, well, you are interfering with the affairs of the corporation. Corporations do not exist in nature; they are the creations of positive legislative action. No corporation anywhere has powers except those that are given to it by a government, and governments tell the corporations what powers they have, what immunities they have, and what rules they follow. The SEC just intruded very deeply into the affairs of corporations by requiring the posting of the compensation.

We say that under current rules, including some State laws, and it varies from State to State, the shareholders don't have enough rights. And all we do here is empower the shareholders to vote on the compensation of the people who work for them.

The last dogma I would deal with is, well, how can the shareholders know that? It is extraordinary to me, Mr. Chairman, to listen to people who ordinarily are quite respectful of the wisdom of the market. And what is the market? The market is the people who buy the shares. Those are the people who make up the market. And apparently this group of people who are the shareholders are in most respects quite wise. But when it comes to deciding how much to pay the people who work for them, they get stupid, and this is somehow beyond their capacity.

We disagree with that. We think this is a moderate and temperate approach to the issue of runaway compensation, excessive compensation, not in every case, and in every case it wouldn't be used negatively.

I should have said one other thing. No one has shown any correlation between these outsized compensation examples and any metric of success. Indeed, too often they are metrics of failure because they are payoffs to get people to leave quietly.

So we hope that this bill will be adopted and that shareholders who own the companies will have the right to express their opinion to the boards of directors on the level of compensation for the top employees of the company.

Mr. Chairman, I reserve the balance of my time.

Mr. Chairman, I yield 5 minutes to the gentleman from Georgia (Mr. Scott), one of the most active members of our committee and a man with significant business experience.

Mr. Chairman, I will yield myself 1\1/2\ minutes.

I congratulate the gentleman on the high art of selective quotation, because he quoted from former Secretary Reich. He left out the thrust of the article which was, he was against doing this because instead he thought we could change the Tax Code. In fact, that article is mostly an attack on the tax cuts which the gentleman from Delaware supported.

Secretary Reich's article is essentially, and I will submit it for the Record under our general leave, I was waiting for the gentleman to quote those parts of Mr. Reich's article in which he calls for significant increases on taxation of upper-income people. I have to say to my friend, it is only a partial quotation.

I am on my time. I gave myself a minute.

I was frankly waiting, and I was disappointed, but that happens a lot in life, for the gentleman to get to the part of the article that he quoted selectively in which that article says what you really want to do is make the tax system more progressive. I suppose the gentleman didn't want to quote criticism of tax cuts that he voted for, but it did seem to me, if we are going to be quoting things, Mr. Reich said not that he was opposed to this as a bad idea, but that a much better way to do it would be to undo the tax cuts that the gentleman from Delaware supported at the upper brackets.

Mr. Chairman, I would ask to insert in the Record the article by Robert B. Reich.

[From The American Prospect, April, 2007]

Don't Count on Shareholders

(Robert B. Reich)

An acquaintance of mine sits on the board of a major

company that just agreed to pay its CEO close to $10 million

this year, including deferred compensation and stock options.

I asked him how he and his board colleagues could possibly

justify that kind of money. ``No choice,'' he said. ``That's

what our competition is paying. It's the going rate.'' As

Congress struggles to raise the minimum wage to $7.25 an

hour, the going rate of CEO pay is now $5,000 an hour.

Polls show most Americans think this is obscene. But how to

rein in CEO pay? A growing consensus believes the best way is

to give shareholders more voice. New Securities and Exchange

Commission rules require companies to inform shareholders in

greater detail what their companies are paying top

executives. In recent months, shareholder activists have

submitted proposals to 60 companies seeking input on CEO pay.

House Democrats are now working on legislation that would

give shareholders the right to have more say over pay.

But the growing consensus is wrong: Shareholders won't

constrain the growth of CEO pay, because most shareholders

don't care about it. The vast majority own their shares

through mutual funds and pension funds, and don't even know

which companies they're invested in at any given moment.

Their only concern is maximizing the return on their total

portfolios. They keep the pressure on fund managers to do

this by moving their savings from funds that underperform to

those that show better overall results.

Fund managers, for their part, don't care much about CEO

pay, either. They're looking for companies whose share prices

are rising, and they push firms to get their prices up by

shifting capital out of those whose prices are lagging into

those that show more promise.

Presumably, shareholders and fund managers would want to

constrain CEO pay if it hampered company performance, but it

hasn't. While CEO pay has soared over the last 25 years,

share prices have soared, too. Between 1980 and 2003, the

average value of America's 500 largest companies rose by a

factor of six, adjusted for inflation. What happened to

average CEO pay in those companies? It rose roughly sixfold.

Shareholders have no reason to complain. They don't--and they

won't.

Depending on shareholders to rein in CEO pay is like

relying on gamblers to rein in the owners of Las Vegas

casinos. Just look at Britain. Since 2003, changes in British

securities law have given investors there more say over what

British CEOs are paid. Nonetheless, executive pay in Britain

has continued to skyrocket, and now just about matches that

of American CEOs. Companies listed on the London Stock

Exchange have done sufficiently well that British investors

don't care what CEOs are paid.

The real scandal of CEO pay has almost nothing to do with

shareholders. It has to do

with what's happened to the pay of most other workers as CEO

pay has soared. Shareholder returns have kept up with CEO

pay, but median wages have not. In 1980, the CEO of a major

company took home about 40 times what the median worker

earned; by 1990, that CEO's pay was about 100 times the

median worker's; in 2006, it was close to 300 times what the

median worker earned. (Last year, Wal-Mart's Lee Scott Jr.

earned 900 times the pay of the average Wal-Mart worker.)

CEO pay is part of a much larger problem: the growing

portion of the nation's income that's going to a small number

of people at the top. The pay packages of many denizens of

Wall Street are even more outrageous than CEO pay--last year

reaching $40 million for top traders and more than a billion

dollars for top hedge-fund managers. The new stars of Wall

Street are private equity funds that are buying public

companies back from shareholders and raking in 20 percent to

25 percent annual returns for their private investors--mostly

wealthy individuals with yearly incomes already in the

stratosphere.

Not since the robber-baron era have income and wealth been

as concentrated as they are today. This doesn't threaten

shareholders; after all, most shares are held by the wealthy.

It threatens democracy, as the wealthy use their fortunes to

bankroll politicians who tilt public policies in the

direction of the wealthy--by, say, reducing their taxes and

cutting public services for everyone else. It also threatens

our economy, as more and more investment decisions are made

by fewer and fewer people, and as the middle class loses its

capacity to pay for the goods and services the economy

produces.

The answer is not to grant more rights to shareholders.

It's to enact a far more progressive income tax, including a

sharply higher marginal rate on yearly incomes above, say, a

measly million.

I would say to the gentleman, I am baffled by this. On the one hand, this is too intrusive, but the gentleman says a better way would be to require corporations to elect directors by a majority. That would be a far greater intrusion into all of the aspects of the corporation.

But I will say this, if the gentleman prefers and the Members on the other side prefer: that we instead pass legislation that requires all corporations to allow a majority election for directors in an effective way as an alternative to nominations. Maybe we will hold off on this bill and consider it. I await that bill.

The gentlemen on the other side are all full of other solutions, none of which have ever been put to paper.

Mr. Chairman, I yield 6 minutes to the gentleman from Missouri (Mr. Cleaver) a member of the committee and a great ethical expert.

Will the gentleman yield?

I am from Massachusetts, but I do want to report a theft, Mr. Chairman. Apparently someone has broken into our committee office and stolen a whole series of bills that the other side had to deal with all these other things, because I am hearing now about all these other things we should be doing and these other things that we should be addressing, and I haven't seen any of them.

So I want to say to people, unfortunately, all these wonderful ideas that you previously had, and I wouldn't suggest that you are only saying them now as an excuse to beat this bill, please send me copies, because somebody stole the ones you sent me.

I am still in Massachusetts.

And one is quite enough.

Mr. Chairman, I would take 10 seconds to say that the gentleman from California mischaracterized his own amendment. No amendment he offered would expand shareholder rights. He did offer an amendment that said if there is a preexisting right to vote for the majority, then this bill does not apply. But no amendment he offered would expand existing shareholder rights.

I yield to the gentleman from California.

What do you mean you wished to offer? I will take back my time.

I understand that, but let me just give myself 30 seconds.

Mr. Chairman, why didn't he file it as a separate bill? He had no interest in this that I could discover until we brought this bill up. The gentleman said he wanted to offer a nongermane amendment.

Well, you are allowed to introduce bills. Introduce a bill. We will have a hearing. If the gentleman, let me tell my colleagues right now, if they want to introduce legislation expanding the right of shareholders to vote for members of the boards of directors, I will guarantee them a hearing. But the bill has not yet been introduced.

Mr. Chairman, I yield 30 seconds to the gentleman from Georgia (Mr. Scott).

Mr. Chairman, I yield 4 minutes to the gentleman from New Jersey (Mr. Sires).

Mr. Chairman, I reserve the balance of my time.

Mr. Chairman, I yield myself such time as I may consume.

Mr. Chairman, I would just note in passing that I saw the letter from the Chamber of Commerce, and I was particularly struck that the Chamber of Commerce said we don't need this bill because Sarbanes-Oxley has been such a good law. Specifically, what they said was, Sarbanes-Oxley has yielded significantly stronger and more independent boards and compensation committees. So I think that the Chamber of Commerce's endorsement of the good results of Sarbanes-Oxley also ought to be made public here.

Mr. Chairman, I yield my remaining time to the gentleman from North Carolina (Mr. Miller), a relatively senior Member. Not particularly the one I had in mind, but a very able and useful Member.

Mr. Chairman, I would just say I also want to welcome this renewed faith that I have heard from my colleagues in the American corporate system. Recently corporate America and financial America has been lamenting how badly we regulate compared to England.

We have heard from the Paulson Committee, so-called after the Secretary of the Treasury, we have heard from the Chamber of Commerce, we have heard from the McKinsey report that we should be more like England. I am glad now to have this affirmation that even with Sarbanes-Oxley that the Chamber of Commerce praises so loudly, even with the Securities and Exchange Commission apparently not being the FSA, the American system

still works. That is a good counter to some of what we have heard lately.

Mr. Chairman, I move to strike the requisite number of words to first thank the gentleman from Alabama for his kind remarks about the way we have been working together in committee. I would just say that I have too recently been in the minority to be abusive. I hope that will last. I certainly intend it to. I am told, by the way, by our Parliamentarian, who, as the gentleman knows, was the Parliamentarian when the other side was in the majority, we have already had more rollcalls in committee in this year than we have had in the previous congressional session. While we have been moving a lot of bills and we have been able to do it expeditiously, I think we've aired a lot of issues, on this particular case, members of the minority made this suggestion, and it is a plausible one. It improves the bill. I realize that they still don't like it, but I appreciate this constructive spirit, and so I urge adoption of the amendment.

Mr. Chairman, I move to strike the requisite number of words.

The gentleman from Illinois has accurately described this, and I urge its support.

Mr. Chairman, I rise to offer amendment No. 4 and to make a unanimous consent request to modify it.

I appreciate the other side going into their non-objectionable mode, at least for the nonce.

I did this because I had an amendment that included several provisions, one of which was identical to the provisions the gentleman from Illinois just offered, and that having been adopted, it would be redundant to do it again. This is, again, I believe, a technical amendment. It simply tries to conform the language in the bill with regard to what it requires.

I think the best way to say it, Mr. Chairman, is this. There was disagreement on the substance of what we require. We did want to make it clear, however, that we weren't requiring any more than that, and any suggestion that we might have been creating procedural or other kinds of obstacles, we wanted to work together to avoid. This is in furtherance of that, so I ask that the amendment be adopted.

Mr. Chairman, will the gentlewoman yield?

I thank the gentlewoman. She is, as always, a staunch defender of her constituents, including those who were hurt by Enron.

I could not object to this in principle, and I did say this. We made an effort to make this bill minimally intrusive. I would expect that these votes would be promptly published. But the gentlewoman has a legitimate concern, and I would make this commitment to her: If this bill becomes law and we encounter any effort not fully and promptly to publish these, then I promise her an immediate hearing and action on her amendment.

So I think we will take this, I hope, as a chance to give people the message, if this bill becomes law, it should be complied with forthrightly and effectively; and if we encounter any efforts at any kind of obfuscation, then the gentlewoman, I promise her, will be back on the floor with our support.

Mr. Chairman, will the gentleman yield?

The gentleman should give my friends on the other side credit for consistency. As he knows, their definition of democracy has recently frequently included throwing votes away.

I will extend the gentleman a similar courtesy.

Mr. Chairman, I ask unanimous consent that the gentleman from Texas be permitted to proceed for 2 additional minutes.

Mr. Chairman, I move to strike the requisite number of words.

The gentleman from California mischaracterized my argument. I didn't say that it wasn't intrusive enough because it wasn't mandatory. I was responding to his earlier assertion which might have led people to think it was mandatory. I was simply correcting the characterization.

I would say this. If the gentleman wants to introduce a bill, and he complains a little bit, well, that he was only able to offer this amendment because only in this form is it germane to this bill; I know the gentleman is a relatively new Member, maybe he didn't understand that Members have the right to file any legislation they want.

Had the gentleman genuinely wanted to deal with this and broaden the right of shareholders with regard to elections of the boards of directors, that if I were here, I would have filed such a bill, I will tell him now, I will yield only if I can get unanimous consent to extend my time.

If Members tell me that, I will be glad to yield. No problem. I will be glad to yield in a minute just to say this: If the gentleman now decides, having considered this, that he wants to file such a bill, I will guarantee him a hearing. I will say this: We will find more opposition to it if we were to mandate that. That is one of the factors I will introduce.

I would say, until we had filed this bill, I had not seen any indication from the gentleman this is what he wants to do. If he wants to file a bill to give shareholders the right to vote by a majority for directors, and I think there has to be further change, then I would be happy to guarantee a hearing.

I will yield to him.

I am taking back my time.

I will explain why to the gentleman, because I think it's going to be hard enough to get even this through. We have had people who said this is way too much. I do not think the gentleman speaks for his party in being supportive of something that will be far more opposed by a broader segment. If, in fact, that would happen, I would be supportive, but I do not want to have the chance to sacrifice this.

I will say one other point. The argument is, why do you single this out? I believe there have been problems with boards of directors in general, although I will repeat again that the Chamber of Commerce, as was noted, thanks Sarbanes-Oxley for significantly improving the quality of boards of directors. I think our former chairman should be pleased to have this ringing endorsement of his handiwork from the Chamber of Commerce.

But there is still this problem, boards of directors are at their least independent in dealing with the CEO who may have selected them. I do think there is reason to single out the CEO-board relationship from other issues.

The other question I have is this and why I wouldn't vote for this amendment in any case, it says a majority vote, but here is the problem. In many corporations, there is no way to nominate someone to be on the board, other than by the board. There are many corporations that do not allow that.

If the gentleman wants to come in with a bill that says shareholders, a certain minimum number, not any one person, but if we could agree that a reasonable number of shareholders could designate alternative candidates, then we could do this. An election in which you require a majority to be elected is part of the democracy, but an alternative is also part of the democracy.

The gentleman has half of the democracy in here. He has a requirement of the majority vote, but no requirement that there be any competition. As we all know, the fact of competition could affect the final vote.

If the gentleman's newly found interest in this sustains itself, and he says it will, and he wants to file a bill that requires that there be access, proxy access to our nomination process and then a majority vote, he will have my support. Until then, though, I see no reason, in the hopes of that, to get rid of this bill.

I do want to respond to an earlier comment by the gentleman from New Jersey who said we could only do it for excessive compensation. He fundamentally misunderstands this bill and contradicts itself.

It is not the job of the Congress to say what it is or isn't excessive. We have individual opinions about excess. We are leaving it to the shareholders.

The gentleman said they should only have to vote if it is more than such and such above the average. What about if you are getting average pay for a subpar performance? What if the shareholders of a particular corporation say, this man doesn't deserve the average, this woman hasn't lived up to the average?

The notion that we should qualify the abilities of shareholders to vote on what to pay the owners of their own company, based on what we think is excessive, an empirical definition put in the bill, fundamentally misunderstands what we are trying to do, which is to empower the shareholders to express their opinion.

Members keep saying it is simply only advisory. I do not think, Mr. Chairman, that anyone believes that. I do not think that anyone thinks that an advisory vote of shareholders would be easily dismissed by boards of directors.

One final point, the suggestion if we do this, the boards of directors and CEOs in pique will take their companies private, when presumably they otherwise wouldn't, because that is the only way it could be causal, what a condemnation of CEOs. How dare you vote on my pay? I will take my company private.

By the way, in fact, you can't take the company private over the shareholders' objections.

I just want to repeat the point I made. This threat that we will take the company public, the CEO will take the company public, understand what that says: That if the CEO's pay is subject to a shareholder vote, in retaliation, he will make a fundamental change in the ownership structure. And, by the way, that assumes that the shareholders don't have anything to say about it. No, I do not think that shareholders will sit and vote for a takeover of the company just to allow the CEO to shelter his or her pay; so this threat, I think, is an empty one.

Mr. Chairman, would the gentleman yield me 1 minute? I will talk fast.

I just wanted to say that this does not in any way enhance democracy. The notion that if you vote against this bill, you vote against democracy, makes no sense.

The gentleman says it is an incentive to make the corporations do this. Apparently he believes that, assuming a nonbinding, ineffective, toothless advisory vote will provide a major incentive to corporations to make a major structural change; I don't.

I think the gentleman from North Carolina did correctly state my view, but my position was not simply to keep this bill clean, we did accept a couple of technical amendments. I would point out to him, in committee, the gentleman from Connecticut (Mr. Shays) had a substantive amendment, which we accepted, dealing with rights.

My view is this: I agree on the principle that a fiduciary's vote should have to be made public, but I wouldn't want to limit it only to pension funds. I also don't think it should be limited only to this subject matter, although I agree, given germaneness, the gentleman couldn't have broadened it beyond that subject in this bill. But it could be broadened beyond pension funds.

I believe we should have a hearing on the principle where the gentleman is correct, and I agree with him, that fiduciaries should have to be made public, but that is all fiduciaries on all issues.

Mr. Chairman, will the gentleman yield?

I appreciate that spirit of cooperation, but it is getting late, and Friday is coming, so I would offer either a letter or roll call, but not both.

Mr. Chairman, will the gentleman yield?

I have just been advised by staff, who is very knowledgeable on this, that part of the problem is, and I understand the gentleman has, as I think is appropriate, substantively the model of what was done with mutual funds, but I have been reminded that the SEC has a plenary power over mutual funds that it

does not have over foundations. I have now been instructed that the SEC could not do that. You cannot reason that what they can do over mutual funds to what they can do over these other fiduciaries, so I think it would take separate legislation.

Mr. Chairman, I move to strike the last word.

I am disappointed in the characterization. In the first place, it is not accurate that germaneness prevented this from being a broader amendment. As I acknowledged, germaneness does prevent this from getting into other subject matters. But nothing would have prevented this from applying to the other entities that my colleague from North Carolina enumerated. Nothing would have said that other fiduciaries could have been covered. And that is why I am against this amendment.

Frankly, we have a difference between the parties here to a very great extent on labor unions and the contribution they make to the United States.

Yes.

No, I will take back my time to say to the gentleman, I will not legislate on serious subject matter involving large numbers of institutions on a unanimous consent agreement to an amendment that he filed when he could have filed whatever he wanted at a quarter to 8 or at any other time. I think there should be hearings. I have said we will do this.

You know, the gentleman on the other side may, with the motions to recommit, believe in the 5-minute solution to complex problems. I don't. I think it degrades the legislative process. I will not be a party to it. I will not agree.

The gentleman could have filed any amendment he wanted to that was germane. He could have filed a broader amendment. We could have had more debate and discussion on it.

I do not agree I or he or any of us off the top of our heads are able to decide how better to broaden this. And there is a disagreement between us about labor unions. Let's make it explicit. That is partly what is involved here.

There has been a degree, I believe, of denigration and demonization of labor unions, that is part of the reason I think we have the economic inequality we have. For pension funds I read labor unions because they are identified with unions.

The gentleman from North Carolina, who is a very good lawyer, mentioned a number of other entities that should be covered if you were going to be covering fiduciaries. I do not think it is accidental that only pension funds are mentioned. I think that bespeaks this notion that labor unions are somehow in need of more supervision, that they are more damaging and dangerous. I think the opposite is the case. I think there have been abuses from foundations. There have been some abuses from unions. So that is why I object to doing this, because I do not think it is the first step. I think it is part of a denigration of the role of labor unions from which this country suffers. Indeed, I will just say I am struck as we debate now whether or not to put standards from the international labor organizations into our trade treaties. We are now being told by opponents that we can't do that because America doesn't meet those standards; that because of the years of denigration of the labor unions, we don't meet those standards. So I do not agree to single out pension funds because I do not agree that we should join in this somehow, this suspicion of unions. And I don't agree that in a unanimous consent agreement off the top of our heads we ought to decide how more broadly to do it. I would rather legislation responsibly.

The committee that we are all members of, those of us who are now on the floor, has been, I think, a very thoughtful forum, not just under my chairmanship, under the chairmanship of my predecessor. We have hearings. We have an excellent staff on both sides. We have worked together.

I look forward to hearings on extending the principle of fiduciaries having to reveal how they have voted on all issues and to all fiduciaries. But I do not think we should single out pension funds tonight, nor do I think we should on the fly try to broaden it, so I oppose the amendment.

And I will yield now to the gentleman.

All votes.

Well, it is late and I am sometimes cranky. I can't say that I would be happy to work with the gentleman, but I would be willing to.

I will take back my time to say that you cannot, the gentleman could have offered a broader agreement. I do not agree. Yes, I would ask for unanimous consent to make a slight technical change in an amendment to fix wording. But to go into a much broader version of the subject, under these circumstances, without a hearing, without full participation in a mark up would be inappropriate, and that is what I mean by on the fly.

Mr. Chairman, I move that the Committee do now rise.

Madam Speaker, I move to suspend the rules and pass the bill (H.R. 1515) to amend the Housing and Community Development Act of 1974 to treat certain communities as metropolitan cities for purposes of the community development block grant program.

Madam Speaker, I yield myself such time as I may consume.

Madam Speaker, this is a bipartisan bill that passed our committee unanimously. It addresses a series of glitches which have resulted in the communities of Alton and Granite City, Illinois, losing their status as entitlement communities under the community development block grant program.

These are both cities that have done a very good job of using these funds. There is no reason why they should not continue to be allowed to enjoy this. The events which led to this having happened are complicated, and even more relevant, quite boring, so it does not seem to me that the House would much care about them.

The relevant point is that there is a unanimous view on the part of our committee, and this has been urged on us by the gentlemen from Illinois, Mr. Shimkus and Mr. Costello, that we

should restore Alton and Granite City to their rightful places as entitlement cities, and I hope the House will do that.

I reserve the balance of my time.

Madam Speaker, I yield such time as he may consume to the prime author of this bill, who is a very vigorous advocate for one of the communities he represents, the gentleman from Illinois (Mr. Costello).

Madam Speaker, I yield back the balance of my time.

Offered By: Mr. Frank of Massachusetts

Amendment No. 3: Page 4, beginning on line 8, strike

``Section 16'' and insert ``Section 14'', and on line 11,

strike ``(h)'' and insert ``(i)''.

Offered By: Mr. Frank of Massachusetts

Amendment No. 4: Page 4, line 13, strike ``In general'' and

insert ``Annual vote''.

Page 4, beginning on line 14, strike ``or other meeting of

the shareholders'' and insert ``meeting of the shareholders

(or a special meeting in lieu of the annual meeting)''.

Page 4, line 16, strike ``shall permit'' and insert ``shall

provide for''.

Page 4, line 22, insert ``the corporation or'' after

``binding on''.

Page 5, beginning on line 7, strike ``or other meeting of

the shareholders'' and insert ``meeting of the shareholders

(or a special meeting in lieu of the annual meeting)''.

Page 6, line 3, strike ``shall require'' and insert ``shall

provide for''.

Page 6, line 6, insert ``the corporation or'' after

``binding on''.

Madam Speaker, last Friday, while we were in recess, the Massachusetts Lions Club held a very well-deserved testimonial for Armand ``Skip'' Becotte, Jr., who lives in the town of Fairhaven, Massachusetts, in the district I am privileged to represent.

Madam Speaker, as many Members know, the Lions Club has made as its highest priority helping people deal with health problems, particularly in the area of eyesight. They have also worked on hearing related issues. Personally, Skip Becotte has taken as his motto the words of the great Helen Keller, in her address to the Lions Club, ``Help me hasten the day when there shall be no preventable blindness; no little deaf, blind child untaught; no blind man or woman unaided. I appeal to you Lions, you who have your sight, your hearing, you who are strong and brave and kind. Will you not constitute yourselves Knights of the Blind in this crusade against darkness?''

Currently Skip Becotte is the District Governor for the Massachusetts Lions District 33S, which includes much of Southeastern Massachusetts, including all of Cape Cod and much of the district that I represent. During his governorship the Lions in District 33S have given nearly $200,000 to the Perkins School for the Blind, Massachusetts Eye and Ear Infirmary. Joslin Diabetes Center, New England Eye Center, Schepens Eye Research Institute and many other institutions.

Madam Speaker, Skip Becotte--winner of the Melvin Jones Fellow Award for outstanding service in 2001--is an extraordinary man. A retired police officer and father of five, his life exemplifies service to others. I congratulate the Lions Club for honoring this man and I am glad to share with my colleagues the story of his work because it is an inspiration to all.

Mr. Speaker, I ask unanimous consent to correct a clerical error in the passage of the recommittal amendment to

Mr. Speaker, I will explain it. We had talked to members of the minority. In the engrossment of H.R. 1227, the Clerk made some clerical errors. We were notified; the staff of the Committee on Financial Services talked to the minority staff. This is a request to correct some errors that were made in the recommit.

It is not in any favor to us. If you want the thing uncorrected, go ahead and object.

Well, I don't expect the gentleman to recall it. I did not recall it either. We didn't know they made clerical errors. They didn't tell us they made clerical errors.

Mr. Speaker, if the gentleman would yield to me, I don't know what the clerical error was. We were notified that there was an error in the transcription. We did not know what the error was. Members of our staff spoke to the minority staff on the Financial Services Committee and explained it. I don't know how they mistyped it. I wasn't there when they did it. I don't know what the clerical error is. I wasn't particularly concerned. We thought it was routine.

If the minority wants the bill to go uncorrected, that is the minority's choice. We did speak to the staff beforehand.

I will withdraw it, but I am not sticking around to make it again.

Mr. Speaker, I withdraw the request, and let it stand uncorrected.

Madam Speaker, on Wednesday, March 14, former Senator Alan Simpson published an eloquent and well-reasoned argument for total repeal of the restrictions that now exist on patriotic gay, lesbian, bisexual and transgendered people serving in the military. It is particularly noteworthy that Senator Simpson, like General John Shalikashvili, was an influential supporter of the current restrictive policy when it was imposed in 1993. Like General Shalikashvili, Alan Simpson with the forthrightness and intellectual honesty that marked his distinguished career in the Senate now says that it is time to end that policy, noting that there has been a substantial diminution of anti-gay and lesbian prejudice among the American people, which means that the argument that allowing those of us who are gay, lesbian, bisexual and transgendered openly to serve would somehow cause morale problems because of widespread prejudice against us.

Senator Simpson goes on to note that at a time when we are facing a shortage of people able and willing to serve in the military, it is particularly foolish to refuse to allow people who want to serve to do so based on outdated prejudices against them. And I do want to note in this context that even when he was defending a total ban on gays and lesbians in the military in 1990, then General Colin Powell acknowledged that that was not because there was any reason to conclude that gay or lesbian people would be inferior members of the military, but again, only that we were the victims of a prejudice that could be disruptive.

It is particularly disappointing to me, Madam Speaker, therefore, that just as Senator Simpson and General Shalikashvili have acknowledged the diminution of this prejudice, the Chairman of the Joint Chiefs, General Peter Pace, has tried to reinvigorate it. General Pace's comment that we who are gay, lesbian, bisexual or transgendered are ``immoral'' solely because of that fact, without any judgment about how we in fact interact with other human beings, is prejudice at its worst. If he were a private citizen, the fact that he felt so unfairly negative towards so many of his fellow citizens would be purely his business. But in fact he cited his condemnation of us as one of the main justifications for a public policy that excludes patriotic gay, lesbian, bisexual and transgendered people from serving in the military. He has since, of course, retracted that part of his statement, but it is clear that he did so only because he has been criticized for it, and not because there has been any change in his opinion.

Madam Speaker, it is entirely wrong for such a high position as Chairman of Joint Chiefs of Staff to be occupied by someone who is prepared to consign millions of other Americans to second class status because he disapproves of consensual, mutually respectful intimate behavior--that the Supreme Court has made clear can never be criminalized--between consenting adults. Such an effort to use public policy to enforce private views would be strongly rejected, I hope, by the President and others in the administration if it were to be aimed at any other group. I deeply regret that we have not seen a similar reaction when the victims are those of us who are gay or lesbian.

The article by Alan Simpson follows:

[From the Washington Post, Mar. 14, 2007]

Bigotry That Hurts Our Military

(By Alan K. Simpson)

As a lifelong Republican who served in the Army in Germany,

I believe it is critical that we review--and overturn--the

ban on gay service in the military: I voted for ``don't ask,

don't tell.'' But much has changed since 1993.

My thinking shifted when I read that the military was

firing translators because they are gay. According to the

Government Accountability Office, more than 300 language

experts have been fired under ``don't ask, don't tell,''

including more than 50 who are fluent in Arabic. This when

even Secretary of State Condoleezza Rice recently

acknowledged the nation's ``foreign language deficit'' and

how much our government needs Farsi and Arabic speakers. Is

there a ``straight'' way to translate Arabic? Is there a

``gay'' Farsi? My God, we'd better start talking sense before

it is too late. We need every able-bodied, smart patriot to

help us win this war.

In today's perilous global security situation, the real

question is whether allowing homosexuals to serve openly

would enhance or degrade our readiness. The best way to

answer this is to reconsider the original points of

opposition to open service.

First, America's views on homosexuals serving openly in the

military have changed dramatically. The percentage of

Americans in favor has grown from 57 percent in 1993 to a

whopping 91 percent of 18- to 29-year-olds surveyed in a

Gallup poll in 2003.

Military attitudes have also shifted. Fully three-quarters

of 500 vets returning from Iraq and Afghanistan said in a

December Zogby poll that they were comfortable interacting

with gay people. Also last year, a

Zogby poll showed that a majority of service members who knew

a gay member in their unit said the person's presence had no

negative impact on the unit or personal morale. Senior

leaders such as retired Gen. John Shalikashvili and Lt. Gen.

Daniel Christman, a former West Point superintendent, are

calling for a second look.

Second, 24 nations, including 12 in Operation Enduring

Freedom and nine in Operation Iraqi Freedom, permit open

service. Despite controversy surrounding the policy change,

it has had no negative impact on morale, cohesion, readiness

or recruitment. Our allies did not display such acceptance

back when we voted on ``don't ask, don't tell,'' but we

should consider their common-sense example.

Third, there are not enough troops to perform the required

mission. The Army is ``about broken,'' in the words of Colin

Powell. The Army's chief of staff, Gen. Peter Schoomaker,

told the House Armed Services Committee in December that

``the active-duty Army of 507,000 will break unless the force

is expanded by 7,000 more soldiers a year.'' To fill its

needs, the Army is granting a record number of ``moral

waivers,'' allowing even felons to enlist. Yet we turn away

patriotic gay and lesbian citizens.

The Urban Institute estimates that 65,000 gays are serving

and that there are 1 million gay veterans. These gay vets

include Capt. Cholene Espinoza, a former U-2 pilot who logged

more than 200 combat hours over Iraq, and Marine Staff Sgt.

Eric Alva, who lost his right leg to an Iraqi land mine.

Since 2005, more than 800 personnel have been discharged from

``critical fields''--jobs considered essential but difficult

in terms of training or retraining, such as linguists,

medical personnel and combat engineers. Aside from allowing

us to recruit and retain more personnel, permitting gays to

serve openly would enhance the quality of the armed forces.

In World War II, a British mathematician named Alan Turing

led the effort to crack the Nazis' communication code. He

mastered the complex German enciphering machine, helping to

save the world, and his work laid the basis for modern

computer science. Does it matter that Turing was gay? This

week, Gen. Peter Pace, chairman of the Joint Chiefs, said

that homosexuality is ``immoral'' and that the ban on open

service should therefore not be changed. Would Pace call

Turing ``immoral''?

Since 1993, I have had the rich satisfaction of knowing and

working with many openly gay and lesbian Americans, and I

have come to realize that ``gay'' is an artificial category

when it comes to measuring a man or woman's on-the-job

performance or commitment to shared goals. It says little

about the person. Our differences and prejudices pale next to

our historic challenge. Gen. Pace is entitled, like anyone,

to his personal opinion, even if it is completely out of the

mainstream of American thinking. But he should know better

than to assert this opinion as the basis for policy of a

military that represents and serves an entire nation. Let us

end ``don't ask, don't tell.'' This policy has become a

serious detriment to the readiness of America's forces as

they attempt to accomplish what is arguably the most

challenging mission in our long and cherished history.

Mr. Chairman, I rise in opposition to the amendment.

Mr. Chairman, I yield myself such time as I may consume.

The gentleman from Texas once again referred to an earlier amendment from yesterday, but trying to understand this particular amendment has nothing to do with whether you construct or destruct or replace public housing. What this says is the following: There were people who were living in the gulf area who were receiving some form of assistance under HUD programs. Some of them lived in public housing, some of them were in vouchers, some of them were living in subsidized housing for the elderly and the disabled. The places where they were living were washed away in the most literal, physical sense.

We all agree that we have not yet, in the gulf area, replaced that housing. It's true there have been slowdowns, for instance, in Road Home money in New Orleans. But in Mississippi earlier this year, the Oreck Vacuum Company, which to its credit had tried to help the people in the gulf by reopening a factory that the company had in the gulf, shut the factory down because, they explained, the shortage of housing made it impossible for them to recruit

people. There was a physical shortage of housing, and we have people who were once living in the area who have moved to other places. Some of them may still be in the area.

We know that employment in the gulf area hasn't yet returned to its prior level, and we have this chicken-and-egg problem of housing and unemployment. We have now about 12,000 people, who were affected by this amendment, who were previously receiving HUD assistance. Because of the hurricane, the form of assistance they were receiving is no longer possible. They are the ones who were on these disaster vouchers.

Now, before we brought this bill out, those people were legally going to lose those vouchers as of the end of this fiscal year, September 30, an uncontested part of the bill. I appreciate the minority's acquiescence in that. There is some agreement here between us. An uncontested part of this bill extends into November.

The amendment today says that those people who were on HUD assistance before, they have to have been eligible before and still be eligible by various income and other qualifications for HUD assistance, that if as of December 31 of this year they have not been able to find alternative housing, we will not administer what my friend from Texas called ``tough love'' by kicking them out.

I do not think these are appropriate candidates for tough love. These are not people who are in some situation through their own lack of character. They are people who were displaced by a great physical disaster.

Now, I will acknowledge that the minority side in our committee offered an amendment in particular or raised an issue that we thought was correct. As originally drafted, this particular language would have not only extended the vouchers for those who have been in the disaster situation, but would have continued them, adding to the stock.

Now, we did that because the gentleman from Texas correctly said you don't want to put these people ahead of other people who might be necessarily, who might have a need. So we wanted these to be additional vouchers, not to bite into the other section 8. But we incorrectly, in my judgment, drafted this originally so that even after the current recipients, the current recipients of the disaster vouchers, the victims of New Orleans, as they no longer needed the vouchers or were no longer eligible for them the vouchers would continue to be part of the overall number.

We offered an amendment, unanimous in the committee, that said, no, they will be what we call disappearing vouchers. That is, there is a fixed number of people who now have these vouchers.

As those people die, find other housing, become economically ineligible, as we hope many of them will be as they are able to return to jobs, for whatever reason, as they no longer need the vouchers or are eligible for them, the vouchers will cease to exist.

So they are permanent in one sense, but not in another. They are permanent as long as this universe of 12,000 recipients of HUD help before the hurricane still need them. But as the people in that category no longer need them or are ineligible, they will disappear. So they are not permanent in that sense.

Now, again, we have acknowledged that there have been slowdowns in trying to rebuild the housing. So the question is, if we cut this off as of December 31, what will happen to those people? How many thousands of them will have no place to live?

And then, by the way, they will become competitors with others for section 8. This is a separate category of vouchers for people who were victims of disasters. Some of them live now in other parts of the country. Abolish this separate category as of December 31, and then these people will be competing with other people.

And again I want to go back to a point I made yesterday. I don't understand the resistance to reaching out to these people. They were living in their homes, and a hurricane wiped their homes out. They are not wealthy people. They are not middle-income people. They are people who were otherwise eligible for HUD programs. They were people who were complying with the terms of those programs because they hadn't been expelled from them, and their homes were destroyed.

And we had hoped that by now we would have done a better job collectively of helping them relocate. We haven't. There is plenty of blame to go around. One place that does not seem to me the blame sticks is with these people, these people who had vouchers, who had public housing residences.

And the question now is, do we say to these victims of the hurricane, we are sorry that it has taken us 18 months to get things organized? But you know what? You have only the rest of this year to find a new place to live.

There are elderly people here. There are disabled people here. There are others. They came from a place where we know employment hasn't come back. Why the insistence on treating them as people who are somehow looking for something they don't deserve? Why the refusal to say, you know, we haven't done the right thing in terms of overall. We hope we will, but as long as you are in this situation where you were displaced physically by a disaster, and as long as back in your home area there isn't sufficient replacement housing, and you know, in Mississippi and it is true, Mississippi has done better on the CDBG than Louisiana. But you just have to pick up the paper to read about the insurance fights. There hasn't been a massive amount of rebuilding in Mississippi either.

You then are telling the people who were the recipients of these vouchers as of December 31 you are on your own. Find the housing, or compete with a number of other people for limited stock.

These vouchers go only to people who had previously been on HUD assistance who were physically displaced by the hurricane, and the vouchers are only for them. And as they begin to find other housing, as they die off, as they will, as people get new jobs and aren't eligible, the vouchers will disappear.

I very much hope that this amendment is defeated.

Mr. Chairman, I reserve the balance of my time.

Mr. Chairman, I yield such time as he may consume to the gentleman from Missouri (Mr. Cleaver), a member of the committee.

Mr. Chairman, the gentleman from Texas has given us a good example of the meaning of true conservatism.

He had a speech written on this amendment when the bill was first introduced. We have amended the section he is talking about, but he still likes that speech so much he won't get rid of it. He keeps talking about permanent section 8s. They were permanent when the bill was introduced, I agree. When the bill was introduced, they were not just disaster vouchers for the people who were displaced from their homes by a flood in New Orleans, but even after those people no longer used the vouchers, they would remain on the books. He objected to that and we agreed to that part of his objection.

We adopted an amendment that says they disappear when the people disappear. So let me put it this way: These vouchers are permanent only if 12,000 refugees from the New Orleans hurricane are permanent human beings. If they live forever, so does the voucher program. But I do not think that every recipient of elderly housing is going to be permanently with us. I will lament their passing, they are undoubtedly decent people, but they are not permanent. And so the gentleman's politics and theology are both incorrect in this case. They are by no means permanent.

He said anybody who had a voucher in New Orleans can go back and get it, but they were people who lived in public housing. They can't have a voucher. Public housing was physically destroyed. There were people who lived in

202 housing for the elderly, and housing for the disabled; that housing has been destroyed.

What we are doing here is providing a replacement not just for the vouchers in New Orleans but for physical housing that was destroyed in New Orleans.

Finally, the gentleman said they can go to Houston if they are eligible in Houston; but previously he said we don't want them competing. So either they compete with the people of Houston, who have already been very decent, or they get nothing. I hope the amendment is defeated.

Mr. Speaker, I have a parliamentary inquiry.

Mr. Speaker, is it in order to move that the gentleman from Mississippi's right to address the House be restored?

Mr. Speaker, I move that the rights of the gentleman from Mississippi to speak during the remainder of the day be restored.